Moody's cuts Deutsche Post debt to A3/Prime-2

Moody's Investors Service said it downgraded the long-term senior debt ratings of Deutsche Post AG to A3 from A2 and the short-term ratings to Prime-2 from Prime-1.

The outlook is stable. The downgrade concludes the review that began on June 30.

The downgrade considers that the company "faces serious challenges in turning around its loss-making US Express operations, given its limited scale in the segment, declining economic activity and consumer confidence in the market, coupled with rising fuel costs," Wolfgang Draack, senior vice president at Moody's, said in a written statement.

"Taking into account further substantial cash restructuring costs, Moody's believes that a material improvement in [the company's] cash flow leverage is unlikely in the near term," Draack said.

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